Final Results
Bankers Investment Trust PLC
16 December 2002
THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
16 December 2002
Highlights
* Net Asset Value per share fell 16.7% versus the FTSE All-Share Index down
19.7%
* Total dividend per share increased by 3.0% to 6.78p
* Forecast minimum dividend increase of 2.7% to 6.96p per share for 2003
Extracts from the Chairman's Statement
Results
It gives me no pleasure to report our second successive annual decline in net
assets and the share price. The fall in our net asset value per share over the
past year of just below 17% compares favourably with the 20% decline in the FTSE
All-Share Index and also against the performance of nearly all global growth
investment trusts. I can fully understand however that a relatively favourable
outcome is of little consolation to shareholders in what has been one of the
worst years for world equity markets since 1974. On a happier note we plan to
increase the total dividend by 3% and we are forecasting a further increase in
the current year as you will read below.
Assets
At the interim stage we reported a net asset rise of 10%. Stockmarkets rose
through the period largely through expectations of a recovery in the US economy
stimulated by the interest rate and tax cuts following the tragedy of 11
September. In the second half our net assets declined by 24.5% which is one of
the worst six month periods I can remember. Equity markets suffered from a range
of negative factors. In the USA there were fears of a double dip recession and
concerns about the implications of a Gulf War both for the oil price and
consumer sentiment. Equity valuations particularly in the USA were undermined by
fears of over-stated profits, lax accounting and fraud. In the UK and Europe
equity markets suffered equally badly with life assurance companies and pension
funds reducing their equity weightings in favour of bonds and cash.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Assets cont'd
Throughout the past year we have remained positively geared in equities which
benefited us in the first half but not in the second; we also maintained a
significant underweight position in US equities counterbalanced by an overweight
position in the UK and Europe. Japan in fact was one of the better performing
major equity markets until the last month of our year. We have added value
through stock selection in the UK, Europe and Japan, and the performance was
very much in line with the indices in North America. Currency movements were a
marginal negative with a 2% rise in the euro offset by a fall of 7% in the US
dollar and Japanese yen.
Earnings and Dividends
After two consecutive years of earnings declines I can report that our earnings
have resumed an upward trend increasing by 2.0% to 7.02p per share. Although we
have suffered from dividend cuts and a reduction in interest on our cash
deposits, our overall management expenses have declined at a greater rate than
our revenue which has been the main reason for the rise in earnings. We are
proposing a final dividend of 1.74p per share, making a total of 6.78p, an
increase of 3.0% for the year. For the current year we are forecasting a minimum
rise in the total dividend per share of 2.7% to 6.96p. A quarterly dividend of
1.74p will be paid at the end of May, August and November with a minimum final
of 1.74p payable in February 2004.
I am pleased that once again we are able to extend our company's record of
increasing the dividend which has been achieved every year since 1967. During
this period funds have been built up in a revenue reserve that was established
to enable us to maintain payments through the economic cycle. This year again we
are making a transfer to revenue reserve although smaller than the previous
year. At present, and probably for the foreseeable future, dividend increases
may prove hard to come by and we might consider it necessary to draw on our
reserves in order to maintain our progressive dividend policy.
Buy-Backs
We are again seeking shareholders' permission to renew our authority to purchase
up to 14.99% of our issued share capital at the AGM in February 2003. I would
like to remind shareholders that we will only use these powers to provide a
meaningful enhancement to the net asset value per share.
Outlook
We hope that by now stockmarkets will have adjusted to the great excesses of the
1990's and that they are now discounting the poor near-term earnings outlook.
The recent cuts in interest rates by the US Federal Reserve Board and the
European Central Bank should have a beneficial impact on stockmarkets. The US
economy which is so important for the world economy should also benefit from the
most stimulative combination of fiscal and monetary policy for forty years.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Outlook cont'd
The European economies are looking decidedly two-speed with the all important
German economy suffering from weak consumer demand. Here in the UK the prospects
look rather more encouraging that in continental Europe. Any improvement in the
US economy will have an important impact elsewhere. Despite the disappointment
of reporting a fall this year I believe we are coming through the downturn in
stockmarkets in relatively good shape and are favourably positioned for any
improvement.
For further information, please contact:
Michael Moule Vicki Staveacre
The Bankers Investment Trust PLC Henderson Press Office
Telephone: 020 7818 4378 Telephone: 020 7818 4028
Stephen Westwood Stephen Phillips
Head of Investment Trusts Investor Relations Manager
Henderson Global Investors Henderson Global Investors
Telephone: 020 7818 5517 Telephone: 020 7818 6417
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Highlights of the Year
31 October 2002 31 October 2001 Change
%
Assets
Total assets less current liabilities £340,887,000 £404,063,000 -15.6
Net asset value per ordinary share 249.3p 299.4p -16.7
Ordinary share mid-market price 233.8p 280.5p -16.6
Discount (Share Price to Net Asset Value) 6.2% 6.3%
Revenue
Gross revenue £12,303,000 £12,852,000 -4.3
Earnings per ordinary share 7.02p 6.88p +2.0
Dividends per ordinary share 6.78p 6.58p +3.0
Indices
FTSE All-Share Index 1,938.71 2,413.50 -19.7
Standard & Poor's Composite Index 885.76 1,059.78 -22.3#
FTSE World Europe (ex UK) Index (£) 202.24 260.64 -22.4
TOPIX (Tokyo First Section Index) 862.24 1,059.37 -24.4#
FTSE World (ex UK) Index (£) 203.88 259.77 -21.5
50/50 FTSE All-Share/ 158.80 200.00 -20.6
FTSE World (ex UK) (£)
Retail Prices Index 177.90 174.30 +2.1
#£ adjusted
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Group Statement of Total Return (incorporating the revenue account)
for the year ended 31 October 2002
Year ended 31 October 2002 Year ended 31 October 2001
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital losses from investments - (61,161) (61,161) - (80,550) (80,550)
Income from fixed asset investments 11,579 - 11,579 12,062 - 12,062
Other interest receivable and similar 724 - 724 790 - 790
income
---------- ---------- ---------- ---------- ---------- ----------
Gross revenue and capital losses 12,303 (61,161) (48,858) 12,852 (80,550) (67,698)
Management fee (1,265) (1,128) (2,393) (1,388) (1,215) (2,603)
Other administrative expenses (627) - (627) (1,075) - (1,075)
---------- ---------- ---------- ---------- ---------- ----------
Net return/(loss) on ordinary
activities
before interest payable and taxation 10,411 (62,289) (51,878) 10,389 (81,765) (71,376)
Interest payable (722) (1,685) (2,407) (727) (1,697) (2,424)
---------- ---------- ---------- ---------- ---------- ----------
Net return/(loss) on ordinary
activities
before taxation 9,689 (63,974) (54,285) 9,662 (83,462) (73,800)
Taxation on net return on ordinary (831) 494 (337) (800) 489 (311)
activities
---------- ---------- ---------- ---------- ---------- ----------
Available for ordinary shareholders 8,858 (63,480) (54,622) 8,862 (82,973) (74,111)
---------- ---------- ---------- ---------- ---------- ----------
Dividends on Ordinary Shares:
Three interims of 1.68p (2001: 1.64p) (6,359) - (6,359) (5,988) - (5,988)
Proposed final of 1.74p (2001: 1.66p) (2,195) - (2,195) (2,094) - (2,094)
---------- ---------- ---------- ---------- ---------- ----------
(8,554) - (8,554) (8,082) - (8,082)
---------- ---------- ---------- ---------- ---------- ----------
Transfer to/(from) reserves 304 (63,480) (63,176) 780 (82,973) (82,193)
====== ====== ====== ====== ====== ======
Return/(loss) per ordinary share (note 1) 7.02p (50.31p) (43.29p) 6.88p (64.44p) (57.56p)
The revenue columns of this statement represent the revenue accounts of the
Group.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Balance Sheets
at 31 October 2002
Group Group Company Company
2002 2001 2002 2001
£'000 £'000 £'000 £'000
Fixed asset investments:
Listed at market value
In Great Britain 202,917 233,134 202,917 233,134
Outside Great Britain 139,136 164,091 139,136 164,091
Other quoted funds 3,370 4,545 3,370 4,545
Unquoted investments 1,125 1,500 1,125 1,500
Investment in subsidiary undertaking - - 705 651
---------- ---------- ---------- ----------
Total fixed asset investments 346,548 403,270 347,253 403,921
---------- ---------- ---------- ----------
Current assets
Investments - 83 - -
Debtors 8,367 3,343 8,350 3,342
Bank balances and short term deposits 11,215 16,697 11,027 16,552
---------- ---------- ---------- ----------
19,582 20,123 19,377 19,894
Creditors: amounts falling due within one year (25,243) (19,330) (25,743) (19,752)
---------- ---------- ---------- ----------
Net current (liabilities)/assets (5,661) 793 (6,366) 142
---------- ---------- ---------- ----------
Total assets less current liabilities 340,887 404,063 340,887 404,063
Creditors: amounts falling due after more than one year (26,300) (26,300) (26,300) (26,300)
---------- ---------- ---------- ----------
Total net assets 314,587 377,763 314,587 377,763
====== ====== ====== ======
Capital and reserves
Called up share capital 31,542 31,542 31,542 31,542
Share premium account 452 452 452 452
Other reserves 265,213 328,693 265,918 329,344
Revenue reserve 17,380 17,076 16,675 16,425
---------- ---------- ---------- ----------
Shareholders' funds (all equity) 314,587 377,763 314,587 377,763
====== ====== ====== ======
Net asset value per ordinary share (note 2) 249.3p 299.4p 249.3p 299.4p
====== ====== ====== ======
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Group Cash Flow Statement
For the year ended 31 October 2002
2002 2002 2001 2001
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 8,794 8,668
Servicing of finance
Debenture interest paid (2,302) (2,302)
Bank and loan interest paid (122) (128)
---------- ----------
Net cash outflow from servicing of finance (2,424) (2,430)
Taxation
UK tax paid (54) -
Withholding and income tax recovered 208 24
---------- ----------
Net tax recovered 154 24
Financial Investment
Payments received/(made) under futures contracts 133 (51)
Purchases of investments (86,209) (104,503)
Sales of investments 78,541 135,526
---------- ----------
Net cash (outflow)/inflow from financial investment (7,535) 30,972
Equity dividends paid (8,403) (8,469)
Management of liquid resources
Cash withdrawn from deposit 1,757 13,170
---------- ----------
Net cash (outflow)/inflow before financing (7,657) 41,935
Financing
Purchases of ordinary shares - (46,951)
Drawdown/(repayment) of loans 3,117 (1,834)
---------- ----------
Net cash inflow/(outflow) from financing 3,117 (48,785)
---------- ---------
Decrease in cash (4,540) (6,850)
====== ======
Reconciliation of net cash flow to movements in net debt
Decrease in cash as above (4,540) (6,850)
Net cash (inflow)/outflow from (increase)/decrease in loans (3,117) 1,834
Cash inflow from movement in liquid resources (1,757) (13,170)
---------- ---------
Change in net debt resulting from cash flows (9,414) (18,186)
Exchange movements 1,306 2,292
---------- ---------
Movement in net debt in the year (8,108) (15,894)
Net debt at 1 November (23,664) (7,770)
---------- ----------
Net debt at 31 October (31,772) (23,664)
====== ======
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Notes:
1. Return/(loss) per Ordinary Share
Revenue return per ordinary share is based on earnings attributable to ordinary shares of £8,858,000 (2001:
£8,862,000), and on the weighted average number of ordinary shares in issue during the year of 126,169,781
(2001: 128,746,915).
Capital loss per ordinary share is based on losses attributable to ordinary shares of £63,480,000 (2001: losses
of £82,973,000), and on the weighted average number of ordinary shares in issue during the year of 126,169,781
(2001: 128,746,915).
2. Net Asset Value per Ordinary Share
The net asset value per ordinary share is based on net assets attributable to ordinary shares of £314,587,000
(2001: £377,763,000) and on the 126,169,781 ordinary shares in issue at 31 October 2002 (2001: 126,169,781).
3. Preliminary Results
The preliminary figures for the year ended 31 October 2002 have been extracted from the latest Group accounts
and do not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. These accounts
have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them.
4. 2001 Report and Accounts
The figures and financial information for the year ended 31 October 2001 are extracted from the latest
published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have
been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and
did not contain a statement either under Section 237(2) or 237(3) of the Companies Act 1985.
5. 2002 Report and Accounts
Copies of the Report and Accounts will be posted to shareholders in January 2003 and will thereafter be
available from the Secretary at 4 Broadgate, London EC2M 2DA. The Annual General Meeting will be held at the
Drapers' Hall, Throgmorton Avenue, London EC2 on Friday 14 February 2003 at 12 noon.
6. Dividend
A final dividend of 1.74p per ordinary share will, if approved by shareholders, be paid on 28 February 2003 to
shareholders on the register on 24 January 2003. The Company's shares go ex-dividend on 22 January 2003.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 October 2002
Largest Investments
at 31 October 2002
The 40 largest investments (convertibles and all classes of equity in any one
company being treated as one investment) were as follows:
Market Value Market
Value
Rank 31 Oct 2002 Rank 31 Oct 2002
(2001) £'000 (2001) £'000
1 (1) GlaxoSmithKline 12,468 21 (14) Aventis 2,678
2 (2) BP 12,341 22 (23) Irish Life & Permanent 2,676
3 (5) HSBC 8,402 23 (*) Allied Irish Banks 2,576
4 (4) Shell Transport & Trading 8,174 24 (*) Rio Tinto 2,541
5 (3) Vodafone 7,193 25 (*) National Grid Transco 2,457
6 (8) Barclays 5,171 26 (29) Slough Estates 2,296
7 (6) Royal Bank of Scotland 5,068 27 (21) Henderson American Smaller Companies Fund 2,287
8 (7) Lloyds TSB 4,813 28 (*) Samsung Electronics 2,260
9 (9) Total Fina Elf 4,666 29 (19) Prudential 2,216
10 (*) HBOS 4,245 30 (30) Tesco 2,181
11 (27) Unilever 3,915 31 (*) BAA 1,883
12 (10) AstraZeneca 3,816 32 (37) ABN-Amro 1,877
13 (13) Diageo 3,494 33 (*) Alliance & Leicester 1,870
14 (16) Nestle 3,289 34 (20) Aviva 1,862
15 (24) British American Tobacco 3,074 35 (31) Anglo American 1,832
16 (15) ENI 3,006 36 (38) Exxon Mobil 1,831
17 (18) Novartis 2,993 37 (*) ICAP 1,805
18 (11) BT Group 2,904 38 (*) P&O Princess Cruises 1,782
19 (12) Philips Electronics 2,887 39 (35) Richemont 1,760
20 (22) Unibail 2,855 40 (*) Reckitt Benckiser 1,740
These investments total £147,184,000 or 42.5% of the portfolio.
(*) Not in the top 40 largest investments last year.
Changes in Investments
Valuation Purchases Sales Appreciation/ Valuation
2001 £'000 Proceeds (Depreciation) 2002
£'000 £'000 £'000 £'000
United Kingdom 231,888 36,757 33,902 (33,377) 201,366
Europe 73,594 13,357 14,045 (11,990) 60,916
North America 53,941 26,277 25,344 (12,502) 42,372
Japan 26,558 7,592 5,017 (4,766) 24,367
Hong Kong 6,357 1,166 1,905 (133) 5,485
Australia 3,633 958 1,301 95 3,385
Far East 2,657 - - 230 2,887
Latin America 2,492 113 106 (666) 1,833
Other Countries 2,150 3,351 2,206 642 3,937
---------- ---------- ---------- ---------- ----------
403,270 89,571 83,826 (62,467) 346,548
====== ====== ====== ====== ======
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